FuturesTechs Blog

In Brief: All I keep hearing at the moment is how we will have a 10% correction, so, let’s have a look:

The “funnymentalist” community, particularly Stateside, seem pretty happy with the idea that this pullback will be a “normal” affair and will pull back 10% from the January highs, at which point you can happily pile in, buy the dip, and carry on where we left off…

I thought it would be useful to know where this level is on the markets we watch. So here goes, and we’re looking at the Cash Indexes here, NOT the Futures:

Dow: High was 10730. 10% pullback level is 9657 (currently 10023)

S&P 500: High was 1150, pullback level is 1035 (at 1065 right now)

NASDAQ: High was 1897, pullback level is 1707 (1743 now)

DAX: 6094 was the January high, 10% off that is 5485.  BROKEN

FTSE: 5600 high, 5040 is 10% pullback. 5033 was last week’s low, so holding…

Eurostoxx: Pulled back from 3044. 10% back from here is 2740. BROKEN

CAC: high was 4088, so 10% back from there is 3680, BROKEN.

So to summarise,  if anyone stateside says to you about 10% pullbacks the simple thing to say is “thanks, but we’re already beyond that!”… especially if/when the FTSE breaks 5030-40.

Keep safe in these markets.

Last week’s big highlight was meant to be the US Employment Report. As it turned out all the action was before this, and the numbers were a bit of a damp squib (like the topical analogy there?).

Equity markets have caught a fresh bid, and we were early to catch this as there were several reversal patterns on major indices at the start of last week. We were bullish from Wednesday onwards, so have reaped some firm rewards on the back of that timely change of sides.

Most of our readers are short term traders so they benefit from these timely “calls”. Longer term traders and Investors may be on the sidelines waiting for an opportunity to get in, and coming out of a dip or retracement is an ideal opportunity. Often, as was the case last week, our charts can tell us nice and early if it’s likely that a pullback has come to an end.

We are now looking to see if resistance at 5300 in the FTSE Index will be seen off. If this  happens the next upside target is 5650, a failure high from last August.

Gold is on another big run at the moment and has traded up to a high of $1111 as of yesterday morning. Yesterday’s candlestick (A “Shooting Star”) gave a warning that things may be getting toppy at these levels but so far we haven’t seen any downside moves to confirm this, so we’re sticking to the idea of higher prices going forward, targeting $1192 next, then $1250.

Oil is stuck in a range for now. Brent Crude has traded between $75 and $80 for weeks now. We expect this range to get broken with a move higher, and we would then target $90 and beyond. We have been suggesting to our clients to buy the dips to $75, and whatever their timeframe this has worked out well. Longer term holders would never have been offside, whereas those who trade in and out should have been able to jump out at $78 to $80 on several occasions then buy again at £75 next time it comes off.

If you are uncertain of any of the terminology used or methodologies discussed in this report you could swot up on our website. Feel free to ask for a Free Trial by clicking here.

Yours,

The FuturesTechs Team

Every week we send out a weekly round up e-mail to our database, and we figured it would probably be useful to post it here as well, so here goes!

FuturesTechs Weekly Round up - 19th October.

Here is your latest roundup of price movements on the major asset classes in the Investment arena. As regular readers will know by now we at FuturesTechs only look at the price action to determine what trend an instrument is in, and where this suggests it can head in the future. Many technicians use Cycle analysis to make longer term calls, and this is what allowed us to make the “call” that we were near a bottom back in March for Equity markets like the FTSE and DAX. Currently our analysis suggests there is a pullback imminent, but so far each time the market has threatened this sort of move the buyers have stepped back in and bought into the dips. There was some price action towards the tail end of last week that was slightly worrying, but once again the bulls appear to have averted the threat.

The Dow may be above 10000 as we write, but it’s failing to convince and we prefer maintaining a cautious stance for now. I heard a great line on the financial news channels last week. Someone said they were “at the party, but dancing near the door”. That sums up how we feel about the present state of things.

So we’d warn against getting too complacent about this recent rise, and we’d warn against worrying that you’ve missed the boat. Generally tops are formed when people pile in thinking they’ve got to get in because they’ll miss out otherwise!! If our analysis is right there will be a pullback soon, and it could even be a deep one, and just when people think we’re heading back to those March lows is just the time you want to be buying!

Gold has been front and centre on people’s minds of late, and the amount of mainstream press it’s been getting (all bullish) worries us, as far as whether this rally can sustain itself is concerned. BUT it has held above some important technical support levels like the $1027 to $1034 region, so we are happy to stay with the trend and back it to keep heading higher for now.

Oil has been the one that has surprised us. We weren’t expecting to see $75 again in a hurry but we’re above here at present, so now there’s scope for higher prices and we’ve been forced to readjust our thinking.

The Dollar’s weakness is the other big topic that many have had on their minds of late. We are keeping a particularly close eye on Dollar/Yen, actually, and want to see a move through 91.15 to take further pressure off the dollar.

Finally just a reminder that we are exhibiting at the World Money Show this year. It takes place at the QE2 Conference Centre in London (bang opposite Big Ben) on October 30^th and 31^st. Admission is free, so register and be sure to come along and say hello. Click here to register

If you wish to benefit from our analysis on a daily basis it is just £50 a month (+VAT). You can become a member by clicking here.

Have a good week,

The FuturesTechs Team.

Whether you’re trading direct market futures, or CFDs or Spread Betting, the lessons you need to learn to become a successful trader are the same, and they’ve been learnt, usually the hard way, by the best traders in the world. The reason they make money trading isn’t anything to do with the type of product they trade, it’s to do with the lessons they’ve learnt, and their day to day disciplined application of those lessons.

Why have I started today’s blog posting along this line? Because it’s the beginning of September, and we’ve just come out of a tough month. August can often be a tough month for traders, as I suggest in the “PS” from my last blog posting. The other reason I’m talking about this is because we’ve lost a few of our newer “individual” customers this month (which is unusual), and the main theme seems to be that they have lost money in August.

Why is August such a tough month? Because half the market participants go on holiday, and the lack of volume can wreak havoc. There are two very different conditions that can ensue:

The market can suddenly become extremely volatile, with moves making little sense. Moves also tend not to last too long, which can be a real problem for analysts like us and traders like you, who rely on sustainable trends unfolding.

Or the market can just go very very quiet and crab sideways with very little interest shown either way. Again this is problematical for many traders, as there are no big moves to get on.

We find it frustrating to talk about these sort of markets as we feel people don’t want to hear “the market not really going anywhere”. But if that’s what’s happening, then that’s what’s happening! This introduces a use for the FuturesTechs service that I’m not sure our newer customers are fully utilising. We will do our best to get you on the right trends at the right time and keep you in a solid move by sticking with the trend, but if things become messy and confused then we will tell you, and if you’re looking for a solid trend it’s time to step away from the screen. Either look at a different market, or catch up with that pile of paperwork that you’ve been meaning to deal with.

The best traders in the world abide by one word more than anything; and I’ve already mentioned it once today: DISCIPLINE. One very important discipline is to make sure you don’t over-trade, you don’t trade because you’re bored, you don’t trade because you need to make X amount by the end of the month. If there’s no clear trend then you are only going to give your money to the market, and there’s plenty of willing takers of your hard earned lolly.

So always be aware of market conditions, and on this note be aware that we are now entering a very interesting period of the year. The run it to Christmas is usually a time when there are strong moves in the market. Between now and November I’m sure we’ll identify plenty of big moves that can be jumped upon and provide profitable trading opportunities.

We may already have the first of these, with Oil selling off through key support (around $110 in Brent Crude) first thing this morning, and Gold Futures failing at key resistance (850) towards the end of last week.

We’ve been in these markets for years, and been analysing them for professional traders since 2000. We’re giving you the chance to share this wisdom on a daily basis, for just 50 quid a month. Can you afford to pass up this opportunity? Do you want to make money trading, or become another one of the 80% who fail?

You decide.

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Cheers,

Clive.